City of Cape Town’s costly ‘dodgy’ land deal in spotlight

August 19, 2019

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Deal
Source: Google Images

The DA has come under fire for purchasing land in Dunoon for R64 million to appease its constituencies in an affluent suburb, where the City of Cape Town already owns land because they didn’t want a “Khayelitsha by the sea”.

The city has also been accused of maintaining apartheid spatial planning and preventing integration.

The Western Cape Department of Human Settlements confirmed that it financed the purchase of the land at Racing Park, known as Doornbach, at a cost of R64.6m because the city, at the time, “did not have the funding”.

GOOD has now requested the provincial standing committee on public accounts to investigate the purchase of the land.

Good secretary-general Brett Herron said the purchase price of the land had been in excess of double the market value and amounted to wasteful or irregular expenditure.

Herron said the only reason the land, situated “in the black corridor” of Dunoon, was purchased was that it was “out of sight of middle-income” and predominantly white Table View.

He said the city already owned a 20 hectare piece of land at the corner of Potsdam and Blaawberg Roads, Killarney, which was larger than the one purchased in Doornbach and had been previously reserved by the city for a housing development.

Herron said then-MEC for human settlements Bonginkosi Madikizela had been made aware of the information, but chose to disregard it.

“My staff attended a meeting with Madikizela, (Xanthea) Limberg and other city and provincial professional staff (in April 2018) to discuss the Dunoon challenges. At that meeting, Madikizela and Limberg noted that using the Potsdam site would be too politically difficult,” he said.

He further charged that a ward councillor for areas including Table View, Killarney Gardens and Milnerton, had allegedly requested housing projects be stopped in her area because they would make her suburb “look like Khayelitsha by the sea”.

Dunoon is bursting at the seams, with more than 70 000 people living in an area initially designed to cater for less than 10 000 families.

Most families have occupied unused pieces of land, some belonging to private owners, while others have built near the railway lines or are living as backyarders.

In recent months, it has been a scene of violent protests by residents demanding houses and services. Spokesperson for the Department of Human Settlements Marcellino Martin said Madikizela agreed to buy the land as the city was investigating the purchase of the properties adjacent to the Doornbach informal settlement, but did not have the funding at the time. He added Limberg had agreed to the proposal.

“Since this department does not have the power to acquire immovable property in terms of the Housing and Development Act, it instructed the Housing Development Agency to purchase and hold the said land on behalf of the department for development and funded the said purchase at a market value of R64.6m.

“This amount excludes transferring fees and holding costs. The deed of sale was signed on 14 September 2018,” Martin said.

According to Martin, two evaluations were conducted through the agency, costing R71 054 750 and R33 000 000, respectively.

He said the lesser evaluation included erven 35161-35176 and a remainder of erf 38368, but excluded erf 35148.

But only 12 hectares of the 17 hectares of the land could be developed, yielding about 1 200 housing units at a density of 100 units per hectare.

According to documents seen by Weekend Argus, concerns about the valuation of the Doornbach land were raised as early as November 2017.

Spokesperson for the city Luthando Tyhalibongo said the Potsdam land and Doornbach served different purposes and were not comparable.

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